Pensioners ‘should pay more tax to fund their care’, say experts

PENSIONERS should be taxed more to pay for the NHS and their social care, according to a new report.

Jonathan Isaby has slammed the idea to tax pensioners more and take away their benefits [PH/ GETTY ]

They should also be stripped of their free television licences and other pensioner benefits, while the winter fuel payment should only be given only to those most in need.

At the moment, people who work on past pension age do not pay the current 12 per cent National Insurance contribution.

But the study, by a commission sponsored by health think-tank The King's Fund, recommends they continue to fork out.

And people of all ages who earn more should also be forced to pay increased contributions starting with an extra one per cent on their NI bill when they reach 40.

Jonathan Isaby, chief Executive of the Taxpayers' Alliance, poured scorn on the idea.

"After a lifetime of paying in to the Treasury, it's not fair that pensioners could be hit with even higher taxes," he said.

"Funding social care is a huge challenge, but the answer is in redirecting existing resources and looking for partnerships with the private sector rather than hiking taxes on the elderly."

The Commission, led by Dame Kate Barker recommended that pensioners with critical social care needs should have free care and as the economy improves it should be extended to include people whose needs are substantial.

After a lifetime of paying in to the Treasury, it's not fair that pensioners could be hit with even higher taxes

Jonathan Isaby, chief Executive of the Taxpayers' Alliance

But it suggested higher taxation and a cut in benefits to fund this system.

"We recommend on the grounds of equity, affordability and inter-generational fairness that at least some of the extra revenue to pay for the large-scale improvements that we seek should come from the group that will be among the biggest beneficiaries of the changes, namely the older generation and particularly its more affluent members," their report states.

"Resources can be released by targeting existing benefits, away from affluent pensioners, and diverting the money into health and social care."

They said that free TV licences for the over-75s and the winter fuel payments should no longer be provided on a universal basis and limited to those who receive pension credit.

When someone reaches the age of 40 their NI contributions should increase by one percentage point to contribute towards health and social care funding, they said.

Prescription charges should be reduced to £2.50 instead of the current £8.05 but fewer people should be eligible for free prescriptions, their report states.

At present nine in ten prescriptions dished out by pharmacists are given to those who can get them for free - including the elderly, children, pregnant women and some poor people.

Meanwhile, people who receive help the NHS Continuing Healthcare fund should be required to pay their accommodation costs if they can afford it.

In total, the recommended measures would generate around £5 billion, they estimated.

"Our system is not fit to provide the kind of care we need and want," said Dame Kate.

"We propose radical change, greater than any since 1948, that would bring immense benefit to people who fall between the cracks between means-tested social care and a free NHS.

"This includes people at the end of life and those with dementia or other conditions where too often there is a conflict about who pays at the expense of what people need.

"Our proposals would continue a system where costs are shared between the private individual and the state but with the taxpayer carrying a heavier load of that cost than at present.

"The cost of a more generous settlement, though large, can be afforded if phased in over time."

A Government source yesterday denied that NI hikes or any other changes to entitlements were on minister's agenda.

And a spokeswoman for the Department of Health agreed that health and social care services should be more joined up, but said that this is already happening.

"Our £3.8 billion Better Care Fund is making this a reality for the time ever, bringing NHS and social care teams together to help people live independently for as long as possible," she said.

"We are also transforming the way people pay for the care they need, capping the amount they have to pay and providing more financial help.

"We have taken tough economic decisions to support social care services and protect the NHS budget, which we have increased by £12.7bn since 2010."